Oklahoma Commercial Real Estate Market Trends Analysis

Industrial real estate means commercial properties that are typically leased by Business to Business (B2B) companies. B2B companies either make or deliver products to other manufacturers or retailers.

The exception is the rapidly expanding world of fulfillment centers that store and distribute products sold by online sales websites straight to their consumers.

Industrial property investors will hold the asset long-term and function as the landlord. These investments benefit from both income (lease) and the projected appreciation in the value of the property. Lease types can be either gross or net.

Annual and 10 Year Population Growth

Population statistics are significant for industrial investment methods in ways that are different from residential investments. A decreasing population has a more indirect impact on industrial properties by way of a shrinking tax base. Industrial investors have to see that the region’s infrastructure is adequate and adequately administered.

A declining population is an accurate sign that commercial property values are presumably to decrease as well. The tenants for industrial properties require a stable local employee base. These renters will not be comfortable gambling on a location that does not have a growing number of possible employees.

Property Tax Rates

Industrial investors use property tax data as a signal of the strength of a community, just like apartment complex investors. Unstable tax rates indicate a market that most likely isn’t acceptable for your investment’s success.

We offer informative guides about commercial property taxation as well as commercial real estate tax reduction to help newbies get informed about this topic better.

Accessibility

Businesses that lease industrial properties move big products or significant amounts of items. Big tractor-trailer trucks are used to ship these goods. If the company is not far from major highways, trucks can reach them more quickly and without difficulty.

Many industrial tenants have to get to railroad or airport cargo terminals. This means that being near an interstate, which usually runs near airports and railway hubs, a large advantage for industrial assets.

Utilities

Manufacturing properties often require high amounts of electricity and water. If a property doesn’t contain adequate levels of these utilities, some tenants will look elsewhere.

Retail facilities house renters that sell products or services to individuals. This includes single-tenant and multi-tenant properties. Single-tenant real estate might contain a bank, a pharmacy, a restaurant, or an automobile repair center.

A property that contains a couple or more tenants is considered multi-tenant property, as are “neighborhood” shopping centers, “strip” malls, grocery anchored centers, or malls with big nationally known tenants called “big box” shopping centers. A significant shopping center with a mix of categories such as office, retail, and residential are called “lifestyle” shopping centers.

Retail leases are known as “net” leases in which the renters take on the property taxes, property insurance, and common area maintenance of the facility in what is known as “additional rent”. Retail renters also are required to maintain the property.

Retail tenants have particular location requirements that retail investors use when analyzing demographic data.

Population Growth

The overall data for the area being considered isn’t sufficient for retail investors. They also consider the region’s submarkets. Retail sites have to be visible and accessible to their customers as they go about their lives.

An expanding trade area population is a bonus, but if the current population doesn’t hold sufficient shoppers, it is designated an undesirable “green” market. Investors in retail assets will examine all aspects of populace data such as population size, annual and 10 year growth numbers, and how many people work in the trade area.

Median Income

National brands or “credit tenants” have very definitive site criteria that include income levels. Larger incomes show an acceptable location for top end retailers, whereas middle wages are good for middle income retailers such as car parts stores.

Median Age

Retail real estate buyers depend on age data that different investors don’t consider. If your retail property is placed near the age groups that possible renters need, it is simpler to draw them.

Property Tax Rates

Tax rate information is assessed by retail investors for the same reasons as residential and industrial property buyers. Increasing taxes are passed on to their renters which lowers their occupancy rates, and the worth of their property could be lessened over time.

In a city showing high real estate tax rates, it’s even more important to ensure your property isn’t overpriced by the tax office. If this happened, the best commercial real estate attorneys in Oklahoma know how to protest the wrong estimate.

Office space is leased to corporations that need a location for their employees to work. Office units might be large enough for one person or hundreds of employees. Major companies often would rather use their money for company growth instead of acquiring real estate.

The lease utilized for office tenants is a gross lease, occasionally called a “full service” lease agreement. The lease payment incorporates the landlord’s expected expenses for utilities, taxes, property insurance, and maintenance. The terms can be updated depending on the tenant and landlord’s requirements.

Office property investors hold these properties for a long term which gives income from both ongoing rental income and the growing value of the property.

Population

The population demographic data that office building investors look for should show a good pool of workers for office renters. This typically involves the total citizens living there, their education, as well as median age. It’s vital for investors to realize what their prospective clients need and to study the region appropriately.

Property Tax Rates

A well managed city or county that draws potential office workers to the market will not have excessive or consistently increasing tax rates. Strong renters will hunt for that kind of community.

Incomes/Cost of Living

Higher wages could signal an educated populace that many office lessees require. It can additionally show the wage levels that employers will need to pay.

Education

The amount of education achieved by the potential location’s populace is specifically significant to major office lessees. They have to know if they are marketing to tenants who require higher levels of education or not.

When an investor purchases a property, fixes it up, rents it, refinances the property, and then duplicates the procedure, it’s known as a BRRRR kind of investment. This is a type of Buy and Hold method where an income creating asset is owned for a significant period. This plan has the benefit of providing short-term (lease) income and net income from the long-term appreciation in worth.

The investor obtains a rental, repairs or renovates it, and leases it out. As soon as they are able, the investor receives a “cash-out” refinance that enables them to take equity out of the property in cash. This becomes the cash investment on their subsequent property, and they repeat it all again.

To purchase and fix up commercial real estate, investors opt for unconventional financing. Banks and other conventional lenders won’t lend on these deals preferring to avoid a higher risk.

This directory of commercial real estate service providers may shorten your way toward the top Oklahoma commercial private and hard money lending companies and the top commercial rehab lending companies in Oklahoma.

From one of the top commercial and industrial real estate agents in Oklahoma, you can get an expert opinion on the perks and pitfalls of the community for your project. Read on for a set of indicators an agent will inform you about.

Median Gross Rents

Investors want to find desirable current rental rate standards and a history of acceptable rent increases. This single factor carries a lot of weight when the final market choice is made.

Property Value Growth

Real estate values have to be going up in the market for a buy and hold investment to work.

Population

BRRRR investors will analyze the population increase. An expanding population is a reliable supply of renters and is more likely to maintain rising real estate values.

Income

Apartment building investors need to know the wage level of their potential renters. An asset that does not provide the needs of the market will show a high vacancy rate.

Property Tax Rates

Rising taxes obviously cut into an investor’s profit. Stable, realistic taxes are a good signal that the area is a reliable place for your project.

Keep in mind that the Government’s estimates of property market worth are sometimes inaccurate, which makes owners pay too high tax amounts without knowing. The best Oklahoma commercial real estate appraisal companies along with the top commercial property tax protest companies in Oklahoma are used by smart property owners to review the value.

People in the real estate industry think of development as creating entire residential community ventures or any sort of commercial facilities. A developer finds and acquires suitable land and develops either parcels for sale or buildings that are rented to tenants.

A developer must make sure the land is properly zoned, engages civil engineers to plan the site work, engages architects and engineers to create building plans, and goes through the municipal approval process. When approvals are communicated, the property is developed, and the finished product is advertised to the intended users.

Real estate development can take years to finish. The economy or local regulations can shift in a negative way before the project is finished. That is why the most financially risky category of real estate investment is development.

Risks can force you to postpone the process for an unknown period of time. During this pause, the property can be damaged by criminals, weather conditions, or other factors. But you can use the best commercial property insurance companies in Oklahoma to make sure that you obtain a sufficient compensation in such case.

Insurance is a service you are likely to need to show lenders when qualifying for a loan. Ask the best commercial new construction financing firms in Oklahoma what local insurance firms they recommend.

Population

Developers use population size and growth rate in conjunction with economic and education statistics to make sure that they will have enough retail shoppers and residential homebuyers in the area.

Income

Salary levels will tell developers whether the customers and diners in the area are the customers that their renters are after. A place that doesn’t appeal to a high-end retail store might be just what a low priced tenant is looking for.

Office and industrial tenants will want to see the wage rates that their possible labor pool will require. Wage levels help developers see whether a market is suitable for industrial or office properties.

Education

Industrial and office space renters want different achievements of education in the local citizens. High end employers expect to discover a majority of college degrees. Blue collar companies are okay with high school graduates.

Age

Developers search for a median age that indicates residents who are active workers and taxpayers. A population that is still involved in the labor pool is the best for office and industrial building projects. Residents who are actively employed normally go shopping and dine out repeatedly at retail businesses.

A working age populace also has the most active homebuyers that residential investors need.

Investing in loan notes includes paying less than the payoff balance for a loan that’s in place so that the note buyer becomes the lender. Lenders sometimes liquidate loans to raise cash, but they usually sell them due to them not being paid as promised.

A portion of promissory note buyers will re-amortize the loan to help the borrower make their debt payments — for a long-term investment. If the borrower loses the ability to pay, the investor maintains all the foreclosure rights of the original lender and can foreclose to recover their invested amount.

Population

Population size and growth speed are significant to these investors for the same reasons as the rest of investors. This is an immediate “sniff test” of the financial strength of the area.

Property Values

Property market worth growth rates are vital to the mortgage note investment strategy. The rising value of the collateral eases the exposure of the investment.

Property Tax Rates

In a market with increasing tax rates, the greater expense of owning a home may force borrowers into foreclosure. This is dangerous for long-term investors, but good for those who plan to turn their investment around without delay by way of a sale of the collateral property.

A convenient way of investing in the acquisition and oversight of real estate is to acquire shares in a REIT (Real Estate Investment Trust). They generate revenue from rent payments and build long-term asset appreciation.

These trusts have to distribute ninety percent of net income to shareholders as dividends. The ability to invest and withdraw your money as your needs dictate make REITs a good way for a typical individual to invest in real property.

REIT shareholders are called passive investors which demands that they have no activity in the purchase or oversight of any properties.

Investors, who need to step away from active investing but choose to stay in real estate, consider REITs. When you dispose of real estate, you can use the money to acquire REIT shares.

A like-kind exchange is meant to save money for investors who plan to do so. Study the following guides to understand how to benefit from it: Can You Do a 1031 Exchange to REIT Shares? and What Is a DST 1031 Exchange?.

The law demands that you use assistance from a 1031 Exchange facilitator to deem the procedure valid. Find such companies in PropertyCashin’s directory of the best 1031 exchange companies in Oklahoma.

One more investment choice that collects capital from people to invest in real property is a real estate investment fund. They do not possess real property — they hold interest in businesses that do, such as REITs.

Investment funds aren’t obligated to distribute their profits to shareholders. Like with regular stock funds, the profitability is generated by appreciation in the value of their stock.

An investment fund might be a mutual fund, a private equity fund for high net worth investors, or exchange-traded funds (ETFs). Similarly to REITS, real estate investment funds provide investors liquidity by enabling them to sell their shares on the market when needed.

Fund share buyers don’t have a thing to do with selecting properties or locations, which means they are passive investors.